MPAA & RIAA: If People Can Sell Foreign Purchased Content Without Paying Us Again, US Economy May Collapse

from the a-bit-of-an-exaggeration dept

We've written a few times about the upcoming Kirtsaeng case before the Supreme Court concerning first sale rights. If you don't recall, the 2nd Circuit appears to have wiped out the first sale doctrine for content purchased outside the country that you want to resell within the US. As we noted, there are significant worries about how such a ruling could really harm innovation. At issue was a guy who bought textbooks abroad and resold them in the US (for less than the cover price that the publishers wanted students to buy). The courts basically found that because the textbooks were made outside the US, they weren't "lawfully made under this title," which is some clumsy phrasing that's at issue here.

Of course, thanks to our copyright maximalism, under Kirtsaeng, if a product is made outside the US and then imported, US copyright law appears to apply to almost everything that's copyrightable... except that first sale rights go away. If that seems dangerous, you get a sense of how important the Supreme Court's ruling in Kirtsaeng can be, hopefully by bringing back some sanity, and showing that if you legally purchase some digital content you have the right to resell it.

It appears that the RIAA and MPAA are pretty scared about this possibility. They've filed quite the amicus brief in the case claiming that buying goods overseas and selling them in the US is the equivalent of piracy. No joke:

Copyright protection is essential to the health of the motion picture and music industries and the U.S. economy as a whole. Like the sale of “pirated” copies, unauthorized importation of copies of protected works made overseas and intended only for sale in a foreign market can undercut or eliminate the economic benefit that Congress intended to provide under the Copyright Act.

Oh, and it gets worse. You see, if that darned first sale is allowed on foreign goods, why (*gasp*) the MPAA and RIAA might actually have to deal with people buying goods in one market and selling them elsewhere. Horrors!

Extending the first sale doctrine to copies made abroad for distribution in a foreign market could impede authors’ ability to control entry into distinct markets, limit their flexibility to adapt to market conditions, or undermine territorial licensing agreements. If accepted, Kirtsaeng’s view of the first sale doctrine could thus prevent U.S. copyright holders from obtaining the economic reward Congress intended to provide under U.S. law to motivate investment in creative activity.

Now that's an interesting interpretation of copyright law. The RIAA and MPAA are arguing that if they can't block people from importing the versions they sell overseas, it will somehow motivate less investment in creative activity. Really?

Here's the real problem: the RIAA and MPAA want to have their cake and eat it too. If products bought abroad and then imported into the US don't get first sale rights, then it seems only reasonable that they shouldn't get US copyright protection either. Part of the deal with copyright protection in the US is that as part of it, you accept that buyers have first sale rights that allow them to resell what they legally purchased. What the RIAA and MPAA are attempting to do here is to take away the public's right to resell what they've legally purchased, because it might interfere with one aspect of their preferred business model.

Of course, what this really comes down to is that the RIAA and MPAA absolutely hate the idea that they might have to compete in a global market. They more or less admit this in the brief, suggesting that prices are cheaper elsewhere in the world because copyright law sucks in other places... and allowing cheap goods into the US means that they don't get the "separate benefit" of expansive US copyright law:

When copyright owners distribute tangible copies of creative works in a foreign market, they recoup the economic benefit made possible by the copyright law of that country, which may be substantially less generous or well enforced than U.S. copyright law. They do not realize the separate benefit Congress intended them to derive from their U.S. copyright. If those copies are imported into the United States without permission, the copyright owner might never obtain that full benefit.

Boohoo. You sell into one market, people buy, they sell into a different market. Every other business in the world has to deal with exactly that. Why should the RIAA/MPAA get special treatment?

Oh, and of course, they rush to play up how much "harm" this would do if they can't overprice content in the US (what this is really about) by trotting out the same debunked stats about just how important they are -- even to the point of suggesting that allowing people to resell goods they legally bought elsewhere would have deleterious consequences for the entire US economy.

Those harms, in turn, could have deleterious consequences for the U.S. economy as a whole. As of 2010, the motion picture and television industry supported 2.1 million jobs and nearly $143 billion in total wages in the United States.... In addition to the major motion picture studios, the industry supports a nationwide network of nearly 95,000 businesses throughout the 50 States. Id. The music industry employed over 25,000 paid employees as of 2004.... The industry supports many smaller businesses such as retail stores, distribution companies, recording studios, and music professionals. The retail trade alone generates over $7 billion from the sale of sound recordings... Maintaining robust copyright protection is thus crucial to preserving not only the health of these creative fields themselves, but also their substantial contributions to the national economy.

That the actual evidence suggests something quite different is, of course, not mentioned. That the overall music and movie industries have been growing quite nicely, even as copyright is more and more ignored, is not mentioned. That more content is being produced and more money is being made... is not mentioned. Inconvenient facts are not allowed.

The filing at one point gets so snarky that it claims that those arguing the other side are using the word "arbitrage" as a euphemism (for what?!), rather than as an accurate description of what happens to normal economies that can't set up protectionist tariffs on importation of goods.

The whole thing shows the same myopic thinking of the RIAA and MPAA -- that anything that threatens their chosen obsolete business model simply must be illegal. Because having the courts and Congress prop up old business models must be better than actually innovating and (*gasp*) letting people resell what they legally bought.

Mike, this is another case where I seriously wonder what you were doing while you were at school, because you clearly didn't get much of what was going on.

You have to pay attention and THINK for a minute. The real issue here is that the economy of each country is not the same. A CD that sells for $10 in the US might only sell for a fraction of that in another country. In order to stay competitive in that country, they have to price at maybe $2. The local distributor licenses from them at a price in consequence of that $2 retail price.

The knock on effect of allowing the product to be brought in from the lowest retail price country and resold in the highest is to have all of the income taken away from the labels, except for whatever the lowest world price is currently.

You think "good for them, maybe they will lower the price". But really, what may happen is that the labels may no longer want to sell in the poorer countries, or may only sell at prices that nobody locally can afford, just to avoid hurting their bigger income countries.

The effects are negative, no matter how you look at it.

Also, you should know the effects that happen when goods are not priced realistically for the market. Very quickly, the goods cannot be produced (or sold) in the higher wage countries, because they cannot afford to make or distribute them. It's not like anyone is making 50-75% margin on things, they cannot afford to take the hit.

The whole story just really points out how unrealistic your views are, and how much you don't seem to be considering the full on implications of such actions.

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It's not like anyone is making 50-75% margin on things, they cannot afford to take the hit.

If by anyone you mean the artists you're correct, if by anyone you are referring to the overpaid people at the *AA's then your are not so correct. Also, if they spent less money buying legislation, they'd have plenty of extra money. Also, if they removed low prices from areas that would do nothing other than drive up piracy. And decrease sales

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Thanks for explaining how commerce works in every other industry that isn't Copyright based.

If the middlemen in certain industries (like clothing, or say food) were critiqued under this new interpretation of the law, it would cause catastrophic harm to the economy.

Imagine the grocery store not having the right to resell fruits and vegetables that they purchased in another country. That's just plain ridiculously stupid. And the RIAA/MPAA arguments in this case are just as stupid.

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It happens in Brazil. A digital camera here costs at least 200% of the price in the US. Computers can reach 400%. And I'm considering the currency, it used to be more when the dollar lost its value here. How do you deal with that?

Well, there are all sorts of ways. One of them is to charge an imports tax and it works pretty nicely (not that I agree with it mind you but it's what they do). The first sale doctrine doesn't apply to major imports, it applies to what the ordinary Jon Doe buys overseas. And it's a pretty small amount of goods simply because there's a limit to how much value you get into the country without paying taxes so the amount of goods the average person can resell is very limited.

And it's amusing when you put it like that when the great majority of MAFIAA's goods is made in China.

You criticize Mike but it seems you were the one that hasn't paid much attention to your classes.

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Yes, but once the content is produced then it is infinitely and cheaply able to be reproduced. The production of the content has a set fixed cost. Which is itself irrelevant to the end consumers.

I don't care how much it cost to make. I care about what I'm paying for it.

And if your cost are so much that you CANNOT make a profit EVER, even after selling a product globally, then you have a problem. And it's not pirates or consumers reselling their legally purchased goods (used or new).

What's misleading is saying basically saying, "People selling used goods that they got elsewhere is going to kill the motion picture and music industry. And will definitely kill the U.S. economy. Proof? No, don't worry about proof, just take my word for it."

I'm still waiting for piracy to kill the music industry. Somehow, it's 2012. Wasn't it supposed to die in 1999 with the advent of Napster? It's still here? THE HELL YOU SAY?!

Re: Protect me because I am a cry baby!

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It's not misleading when you consider the case at hand. The case is that a copyrighted work made outside the US is not "lawfully made under this title", therefore the right of first-sale does not apply. The issue at hand has nothing to do with where the ethereal copyrighted work was written, recorded, conceived, etc, but where the physical container (CD, DVD, paper book, etc) of that copyrighted work was manufactured.

In the case at hand, most likely the textbooks were written here in the US (I couldn't find a reference to a specific textbook in my cursory search, so I can't verify this, but it is very likely to be true), but then manufactured outside the US. So Ninja's point is very relevant. It's where the physical manifestation of the copyrighted work is made that is relevant to this case, not where the original copyrighted work was written, recorded, etc.

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"In the case at hand, most likely the textbooks were written here in the US (I couldn't find a reference to a specific textbook in my cursory search, so I can't verify this, but it is very likely to be true), but then manufactured outside the US. So Ninja's point is very relevant. It's where the physical manifestation of the copyrighted work is made that is relevant to this case, not where the original copyrighted work was written, recorded, etc."

Hey! Hey! Chosen Reject you behave! You leave that poor AC alone! Wtf does where the textbooks where manufactured have to do with his argument?! Huh? Can't you see he's trying to make a point to dismiss Mike's article and the rest of our comments!

I'm sorry but I'm calling bully on your comment! Relevant facts? I think not mister! You can take what is relevant to the court case and the article in hand and begone with it!

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Ninja, no. Wrong.

The point is that the content is generally created in higher wage countries, it is produced, edited, and otherwise generated in higher wage countries. The mere act of reproduction isn't the big end of the stick here.

See, you are falling for Mike's standard logic: ignore what it costs to create the product to start with, assuming someone else actually paid for it, and then concentrate only on the costs to reproduce the physical delivery, without considering what is being delivered.

In the real world. people get paid to make what is on the CD or what had been sold digitally. The writers of books have been paid, the editors paid... and on down the line. That money has to come back somehow.

What you are ignoring is that if product is allowed to flow from the lowest retail cost location to be sold in the highest retail cost location, the price overall will be driven down, to the point where nobody is paying the costs of making the content. At that point, producing it is a meaningless business exercise - it's a loss.

So what happens? Either they stop selling the product in the lowest price countries (why allow the market to get flooded with cheap imports), they raise the price in those countries the point that nobody can afford to buy it, or they stop making content entirely.

Mike knows this stuff. You only have to look at the erosion of the industrial base in the US to understand: Lower wage countries are willing to do the work and ship stuff to the US, and they can do it cheaper than Americans can. The result? The rust belt, the empty factories, and every job including phone support being offshored.

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ignore what it costs to create the product to start with, assuming someone else actually paid for it, and then concentrate only on the costs to reproduce the physical delivery, without considering what is being delivered

We, the consumers, couldn't care less about your costs. There are movies made with less than $10k that earned millions. With $8k I can build a small studio at home and record as many songs as I want, it's not rocket science. Maybe if you didn't pay shitloads to your ceos the profits would be higher ;)
And as I noted in other comments we are talking about the first sale doctrine, not some massive large scale scheme.

That money has to come back somehow.

It's amusing how you simply ignore models that would bring a lot of money in ;) You see, the artists and the fans don't care how the middleman makes their money. Live with that.

At that point, producing it is a meaningless business exercise - it's a loss.

Then please go ahead and go out of business already, we'll be happy, won't shed a tear and won't miss you. While I don't doubt that the middlemen might be taking losses the music sector is thriving. Nobody cried when the ice cutters or the buggy whip sellers went out of business. Except for the ones in the business themselves.

So what happens? Either they stop selling the product in the lowest price countries (why allow the market to get flooded with cheap imports), they raise the price in those countries the point that nobody can afford to buy it, or they stop making content entirely.

Oh please, by all means stop selling, we'll have content in spite of you. And stop making content, we don't care either, there are plenty of good people out there doing content and not being morons like the MAFIAA.

You only have to look at the erosion of the industrial base in the US to understand: Lower wage countries are willing to do the work and ship stuff to the US, and they can do it cheaper than Americans can. The result? The rust belt, the empty factories, and every job including phone support being offshored.

Now that indeed is an issue for physical, scarce goods. I for one know that the textile industry in the US is pretty much loitered (unused) and yet they produce much better quality stuff. It's an issue in Brazil too. However it is NOT an issue in the music/movies/games industry. If you want to sell a lot, stop suing your costumers and start offering decent prices so you'll get your money returned in the quantity of sales, not the individual amount.

Indeed, it's not fun to see what the crappy Chinese goods are doing to the economy as a whole. But the MAFIAA has absolutely NOTHING to do with it or you too can outsource the production to the Chinese. And again it's good to point that we are talking about the first sale doctrine, that applies to goods bought for PERSONAL consumption. So this discussion is meaningless, there's no issue here at all.

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1. NO, ninja -and all of techdirtia- is right: we don't give a SHIT what something -ANYTHING- costs the producer...
(and -in your few-and-far-between moments of humanity- YOU don't either...)

NO ONE goes shopping and compares whether they should get a widget from Brand A or Brand X based on whether Brand A or Brand X has lower/higher production costs... *that* is insane...

we shop on features, price, and convenience...
besides the fact that all the other information regarding their production costs is simply not available, NO ONE gives that crap a second thought...

(NOT that i would trust your average korporation to give honest numbers regarding their production costs, anyway...)

IF i spot a great price on a widget i want/need, i don't start wringing my hands and hoping the producers have low enough production costs to make sufficient profit; NO ONE does that for ANY products/services...

(IN FACT, that is prezactly how the -mythical- free market economy *should* work: you price your widgets too low, you go out of bidness, and another competitor steps up to replace you...)

2. you are a thoroughly disagreeable character; chances are you're a lawyer, amirite ? ? ?
dog damn, i can't wait for the revolution, you fuckers will be the first invited to the necktie party...

it really astounds me how you think insulting EVERYONE is going to win friends and influence people on these issues you supposedly care about...
(i'm thinking the only reason you 'care' about these issues, is because you are -directly or indirectly- paid to do so...)

oh, and for the record, i have NEVER pirated ANYTHING; BUT, i have stopped buying ANY music, movies, etc that are a product of the MAFIAA, because i despise them...

BUT, because of unrepentant MAFIAA apologists like you, i am seriously toying with going FULL PIRATE...

don't you get it, YET ? ? ?
it is not pirate king mike the torrent freak who is pushing me to full blown piracy, it is YOU AND YOUR FIENDS at the MAFIAA who are turning me pirate...
none so blind...

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I usually don't engage in debate with such obvious wackjobs, but yourambling fit of pique is so delicious, I can't resist.

1. NO, ninja -and all of techdirtia- is right: we don't give a SHIT what something -ANYTHING- costs the producer...
(and -in your few-and-far-between moments of humanity- YOU don't either...)

NO ONE goes shopping and compares whether they should get a widget from Brand A or Brand X based on whether Brand A or Brand X has lower/higher production costs... *that* is insane...

we shop on features, price, and convenience...
besides the fact that all the other information regarding their production costs is simply not available, NO ONE gives that crap a second thought...

(NOT that i would trust your average korporation to give honest numbers regarding their production costs, anyway...)

IF i spot a great price on a widget i want/need, i don't start wringing my hands and hoping the producers have low enough production costs to make sufficient profit; NO ONE does that for ANY products/services...

(IN FACT, that is prezactly how the -mythical- free market economy *should* work: you price your widgets too low, you go out of bidness, and another competitor steps up to replace you...)

Lots of ground to cover here. A producer's cost in but one of a myriad of factors affecting price. But affect the price it will. Masnick and his merry band of sycophants, suck ups and nincompoops continually ignore the role of fixed cost in their many screeds against legacy industries. The free market fact of life is that these costs have to be covered in order reward companies and incent them to continue to invest their capital in this market segment. Piracy has the same affect, as you so eloquently put it: "you price your widgets too low, you go out of bidness..."

2. you are a thoroughly disagreeable character; chances are you're a lawyer, amirite ? ? ?
dog damn, i can't wait for the revolution, you fuckers will be the first invited to the necktie party...

I think you'd find me disagreeable no matter what degree I had. And good luck with your "revolution". I've seen the glassy-eyed stoners; unhygienic hippie chicks; effeminate, Communist pseudo-intellectuals; bums and other rabble on the cutting edge of your "movement". Quite frankly, it looks more like a bowel movement to me. So let me know when to expect to hear from the dictatorship of the proletariat. Until then, I'll be here laughing at you.

it really astounds me how you think insulting EVERYONE is going to win friends and influence people on these issues you supposedly care about...
(i'm thinking the only reason you 'care' about these issues, is because you are -directly or indirectly- paid to do so...)

I do care about these issues. But most (not all) of the Techdirtbags are drones. Usually failed creators or professional malcontents who revel in shouting into the TD echo chamber and content with the validation of their fellow zealots and the occasional pat on the head from the Lord High Piracy Apologist.

oh, and for the record, i have NEVER pirated ANYTHING; BUT, i have stopped buying ANY music, movies, etc that are a product of the MAFIAA, because i despise them...

More likely is that you're homeless or live in some sort of flophouse without electricity, etc.

BUT, because of unrepentant MAFIAA apologists like you, i am seriously toying with going FULL PIRATE...

Who cares? from the sound of things you're headed for prison, a shelter or rehab before long anyway.

don't you get it, YET ? ? ?
it is not pirate king mike the torrent freak who is pushing me to full blown piracy, it is YOU AND YOUR FIENDS at the MAFIAA who are turning me pirate...
none so blind...

Right. Blame the people you steal from. I must say you have the whole victim thing down pretty well. Maybe instead of taking other people's stuff you could get a library card or simply do without.

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Lots of ground to cover here. A producer's cost in but one of a myriad of factors affecting price. But affect the price it will.

For the millionth time, consumers don't give a flying fuck about your sunk costs, nor should they. If you can't figure out how to produce/market/distribute something and market it a price that consumers like and you find profitable, that's your problem and your problem alone. Nobody owes you a living.

And good luck with your "revolution". I've seen the glassy-eyed stoners; unhygienic hippie chicks; effeminate, Communist pseudo-intellectuals; bums and other rabble on the cutting edge of your "movement". Quite frankly, it looks more like a bowel movement to me. So let me know when to expect to hear from the dictatorship of the proletariat.

This isn't 1971 anymore, Mr. Bunker, and the people you fight are pretty damn far from a fringe. More like a tenth of the world population.

Until then, I'll be here laughing at you.

Then you'll fight him. Then you'll lose to him. That's the order you will eventually become educated in.

Maybe instead of taking other people's stuff you could get a library card or simply do without.

What part of "I have never pirated anything" is your goofy ass having trouble with? Guy like art guerilla (and myself, for that matter) are your worst nightmare. We're the people who actually do without your so-called "art," and still fight you tooth and nail every step of the way. You have no leverage against us, but we can burn you to the fucking ground. Nice to meet you.

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Guy like art guerilla (and myself, for that matter) are your worst nightmare. We're the people who actually do without your so-called "art," and still fight you tooth and nail every step of the way.

So you fight tooth and nail against something you have no stake in and has no meaning in your life? Interesting, why?

You have no leverage against us, but we can burn you to the fucking ground.

I don't care about you and can see no point in "leveraging" you for any purpose. And as someone so totally removed as you, it's hard to understand what interest you have in burning me to the ground. I really don't even know what your gibberish means.

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So you fight tooth and nail against something you have no stake in and has no meaning in your life? Interesting, why?

The content or industry that produces it have no real meaning to me. Trouble is, the industry's little decade-long hissy fit has rammifications that go well beyond access to its content.

Your industry has waged war against the public domain, which is where much of the art I enjoy comes from. Your industry has waged war with Creative Commons, which where pretty much the rest of the art I enjoy comes from. Your industry has pressured the government into DNS blocking websites that frequently aren't guilty of copyright infringement, has pressured foreign governments into big publicity, SWAT-style raids on foreign businesses that they apparently have no real case against (read: Megaupload), and has even declared the Internet Archive a "rogue website." And many of us - myself included - have been personally threatened just for taking contrary positions to the industry stance on the subject.

The trouble with your crowd is, you automatically think anyone who opposes your maximalism in any way is a "pirate." This is why the widespread opposition to SOPA blindsided you. You just keep going on and on about your alleged "rights," and "stealing," and "entitlement," when in reality most of us have moved past that a long time ago.

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Much of it, yes. Once it's in the public domain, however, it's no longer "tainted."

Not doubting you, but can I get an example?

Jamendo, Vodo, Magnatune are my major sources, and a few specific examples are Josh Woodward, Singleton, Tryad, and Pioneer One.

Are you talking about the SOPA proposals that were withdrawn by the authoras of the bill, or something else?

I'm talking about "This website has been seized by the authority of ICE, and your IP has been logged." I probably should have said "rerouting" instead of "blocking," but eh, semantics.

Why, because they were are resource for infringing content? Big surprise.

Infringing? I know of nothing "infringing" on the Internet Archive. They're primarily a source of public domain material.

Threatened? By who? What were the circumstances?

A certain country music writer, who will remain nameless, since I don't want to start it all over again (and I also can't prove it was specifically him). It involved him getting my phone number and leaving threatening voice mails at my home.

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And again it's good to point that we are talking about the first sale doctrine, that applies to goods bought for PERSONAL consumption. So this discussion is meaningless, there's no issue here at all.

You seem to be having a different discussion that everyone here talking about the Kirtsaeng case. This was a case of textbook arbitrage. Kirtsaeng was bringing in texts from low price foreign markets and selling in to the high price US market.

It is fine if you want to have a discussion about the propriety of someone buying a book at the airport in Bankok and selling it at a used bookstore in the US after they finished reading it on the flight home. I doubt anyone would quibble over that nor waste any time talking to you about it. BUT THAT IS NOT THE DISCUSSION HERE.

If you are interested in discussing the Kirtsaeng case, go read up on it. I will happily stipulate that the law should be enable you to sell the paperback you read on the plane when you get back to the US.

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Brazilian problem is excess bureaucracy and lunatic tax system. It's not greed but rather Governmental inefficiency. And I never blamed the producers, I was just saying that it's MUCH cheaper to buy in the US and sell here. However you can't because you'd have to go through mechanisms that prevent it. If I bought something for personal use in the US and sold here it's ok though. Because it's one unit, at most two. Missing the point much?

I don't know of any band or any major label current recording in China to save money. Production of the CD / DVD is the very small end of things.

That. Precisely why you can sell for lower to reach more people, you don't rely on scarce goods.

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Actually prices in Hong Kong, China are about on par with US for music and movies. Hop across the China sea to Japan, and they are about double US prices.
PS I feel for you in Brazil, considering I deal with the same issues travelling to the East.

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It happens all the time in the UK.

Prices for technology seem to be converted from dollars to pounds by just changing the symbol in front of the number and not looking at the exchange rate, we used to end up paying double the price in the US although as the pound has slipped its more like 60% more now.

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" A CD that sells for $10 in the US might only sell for a fraction of that in another country."

Russian MP3 sites have been around for the better part of a decade. They offer entire albums for a fraction of the cost when compared to services like Itunes, yet they didn't make the RIAA's list of major illegal sources for music piracy - http://torrentfreak.com/images/riaa-chart.jpg.

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"Also if they can sell it for less elsewhere and still make a profit; Why do I allow myself to be gouged just because I live in the US? "

Actually, they often sell it for a fraction of it's true market value, just to stay in the market. What they are making from these smaller countries is often peanuts because of the combinations of low retail price and small markets, which results in small licensing fees. I would say that without the major markets (aka, the Western counties) they wouldn't be able to turn a profit at all. Selling CDs for $2 US wouldn't be profitable at all.

You aren't being gouged because you are in the US, you are paying relative to your income.

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> You aren't being gouged because you are in the US, you are paying relative to your income.

Wait, that doesn't make any sense at all.

I basically haven't bought music CDs or DVDs in years, except maybe at garage sales or at Goodwill. I don't think the full retail price reflects the value, so I don't pay the full retail price. I'm willing to wait for the music or movie or whatever to show up in discount bins or at garage sales. That's the free market. I pay a price that reflects the product's value to me.

Setting a variable price based on the income of the putative purchaser is not free market at all: the seller is saying that the price I pay should reflect something other than the value to me.

I don't know of any sensible market for any good that operates as you say. In fact, the market for some things (computer programmers, call center service reps) has been left to float on a global scale on exactly the free market, price-represents-value-to-buyer type of thing.

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This happens in other markets. If you ever take a cruise, you will meet crew from all over the world. Their wages are generally tied to the cost of living in their home country.

Another example is where a medicine distributed in a third world country is subsidized by first world pricing. Otherwise, the cost under the "free market" price would be unaffordable and sick people would do without.

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i googled the cost of manufacturing a cd, and the cost for making a album cd is about 80 cents for the actual production. the label makes about 6 bucks on it at 15 dollars, the retail makes about 2 bucks. the rest is actually to pay for things such as promotions, and royalties, which is also handled by the label, so they actually get slightly more. note: can not be certain that this info is true, but it seems realistic.

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Somehow those numbers didn't seem to add up.
If $2 goes to the retail store and the material cost is $1 that leaves $12.

According to howstuffworks royalties are typically 8-25% of the retail price, which is $1.20-3.75. Also promotions and other expenses come out of the artists royalties, so that means the rest is the label's profit. That says the label is getting $8.25-10.80 profit from the sale of a $15 CD.

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No, of course not. They would say that the "creators" set the price, since it's theirs to sell. But since the creators see precious little, we would have to say THE LABELS set the price to be absolutely accurate.

All this market talk is a smokescreen for gouging where they can get away with it.

If if really was priced according to it's true market value, it would all be $0.99 worldwide.

And it would all go to the artists, the true "creators", not these increasingly pointless distributor/gatekeepers/labels.

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The fact that it falls apart under scrutiny or implies something you don't like when reduced does not mean the argument can't be reduced. There's absolutely no reason you can't make the same argument for individuals that was made for countries.

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Separating people into different markets based on nation is as arbitrary as separating them into different markets based on individual income. We live in a global economy. I can buy music from Russian websites while residing in the US. It's irrelevant what other people in my country make on average. That's just the content companies trying to justify price gouging. Getting content at a cheaper price from elsewhere in the world is just proving that the price that the market will bear is lower than the local price that the content companies want to charge.

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Paying relative to my income is where I'm having a problem.
I think I would like to pay a fair and reasonable price regardless of my income.Paying what the market will bear is what is responsible for the ever upward spiraling of prices that have nearly bankrupted the US.
By your reasoning,the $200,000 house that someone purchases who has a $50,000 a year income, should cost someone else with a $200,000 income, 4 times (or more) as much.
Why don't we all register our incomes with the store so we can pay for that loaf of bread based on how much money we have!

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The artist makes a few cents on cd's , it is not actually worth them selling them really, the middlemen are the ones that make the money, the studios.
They would not be happy making a few cents per cd, they want cd prices to rise and make more money all the time, remember they are monopolists and believe they have full control of what music you buy and how much you pay for it.

They ignore the fact that a lot of people will not pay the ridiculous prices they used to ask for a cd, they will either buy one track or borrow it from a friend to copy to there PC.
The copyright monopoly is finished, they know it and we know it, they are just trying to wring out as much as they can from the artists that are still dumb enough to sign up to a big studio. Yes they will make money, but most certainly not as much as they could have made going it alone.

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You think you are doing bad. Prices in Australia are usually 50 to 100 percent higher than the US for music, videos, software etc. Then they complain that Australia is one of the worst countries for piracy!!!!

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[i]You have to pay attention and THINK for a minute. The real issue here is that the economy of each country is not the same. A CD that sells for $10 in the US might only sell for a fraction of that in another country. In order to stay competitive in that country, they have to price at maybe $2. The local distributor licenses from them at a price in consequence of that $2 retail price.[/i]

It's not like physical goods (CDs, books, etc.) are made in different places for different markets and they cost substantially different amounts to make. They are made by the cheapest factory that can be found. Very rarely is that place different for differing markets.

So if you can make a profit on a $2 disc in one place, you can pretty much make a profit on the same disc somewhere else (minor distribution cost differences aside) b/c it has the same manufacturing cost.

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Umm, no. That doesn't follow.

"So if you can make a profit on a $2 disc in one place, you can pretty much make a profit on the same disc somewhere else (minor distribution cost differences aside) b/c it has the same manufacturing cost."

The point is that there may be little or no profit in it at $2 retail, and it only happens by taking a huge discount on the licensing fees, etc. It's only done because that is incremental income beyond what is generated in the major markets.

Don't confuse incremental revenue with actual profits. That's like Mike getting all stuck on marginal costs without thinking about the fixed up front costs required to produce the CD to start with (recording and such).

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Not this shit again!

The marginal costs are directly inflated by the labels. Suppoosedly in order to pay for "marketing and promotion" etc. Those are "unnecessary" costs that are charged to the artists in order to recoup costs.

Moreover, if it's incremental income, than that means that the profits have already been made and the increments arew pure profit.

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What is "cost" is irrelevant to consumers. Al;so notice that I put "unnecessary" in quotes.

And as for Adele, it supposedly cost many hundreds of thousands of pounds to advertise nationally. Advertising that the artist pays for at each step, either through royalties or through their advances.

I will, however, see if I can find out, if you will specify which of adele's albums you wish me to do the figures for. Sound fair?

Hollywood Accounting.

> You, or Masnick, don't have the first clue about what it costs to make and then promote a successful record.

Making a successful record can be done for peanuts. It really all just boils down to how much discipline you have.

Promotion is "music production" is mostly a sham. There's already a ready made promotion mechanism. You don't even need to feed it payola. When it's working right, you never know what artists might suddenly gain national prominence.

Most artists (much like authors) probably find that they have to do their own marketing.

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A CD that sells for $10 in the US might only sell for a fraction of that in another country. In order to stay competitive in that country, they have to price at maybe $2. The local distributor licenses from them at a price in consequence of that $2 retail price.

This is how things work in a normal capitalist environment, but you neglect to mention one VERY CRITICAL aspect... The MPAA and RIAA are the SOURCE of the content. They're not worried about people buying Bollywood instead of Hollywood. They don't have to sell for $2 to "stay competitive" into that country, because THERE IS NO COMPETITION, except with themselves. If they don't want their product to undercut their own product, they can normalize pricing throughout their distribution chain. Easy enough done.

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Just to be clear, the RIAA and MPAA are the trade organizations for the labels and studios, respectively. The labels compete against one another as do the studios. In addition, they compete against the indys, foreign producers and more broadly- others competing to capture the entertainment dollar of consumers. Since they compete already for the entertainment dollar, it's understandable that they don't also want to compete with their own product.

And withdrawing from a market is not without precedent. Universal stopped selling DVD's in Spain due to rampant piracy. It's not hard to imagine that a studio would leave a market entirely rather than providing a new source of price competition for it in its most important market.

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Do you feel the same about medicines? If an blood pressure medication sells for $5 in the US and $.05 in poor nations and somebody is legally reimporting it into the US and reselling for $1- I can guarantee that the company will leave that market rather. How will that benefit anyone?

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You can guarantee it? I don't think you can make that or any guarantee. The drug companies, like the mafiAA have been price fixing for many, many years. Look at the drug industry in India, it is thriving w/o all of the patent protection. So please, stop your misinformation campaign here.

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I'm fine with your scenario. If the company leaves the US market, so what. Somebody else will fill their shoes. In fact, in your scenario, somebody already did, and did so in such a phenomenally better way that the original company couldn't compete. What's the problem here? Are you saying the original company would leave the blood pressure medication market altogether? I'm fine with that also. If there is a profit to be made and they don't want any because they can't have it all, somebody will fill their shoes with a generic. Win for the customers who get it cheaper, win for the company that sells it cheaper who now have one less competitor.

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It's not like that. The first sale doctrine applies to content you purchased for personal use. It is forbidden in most countries to buy and resell medicine without authorization.

We are talking about a book/cd you bought overseas and don't want anymore so you sell for the second hand market. It's a single item, at most two if you bought an extra copy. So please, stop missing the point and trying to mislead ppl.

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That's simply untrue. The facts of the case are that Kirtsaeng purchased Wiley textbooks abroad and imported them into the US. The texts were produced abroad and sold for much less than in the US. It wasn't some guy selling a used CD he bought in Egypt when he got back from vacation. Kirtsaeng was engaged in a business enterprise.

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That's simply untrue.

In your dreamland. She didn't import, she bought them for personal use and maybe to gift some friends/relatives. It's not some major import operation. I've bought 8 Victoria Secret lotions last time I went to the US (they are like 20% of the Brazilian price) for my mother, sister, cousins, aunts and two friends of mine. Not any major operation. The first sale doctrine applies.

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"That's simply untrue."

In your dreamland. She didn't import, she bought them for personal use and maybe to gift some friends/relatives. It's not some major import operation. I've bought 8 Victoria Secret lotions last time I went to the US (they are like 20% of the Brazilian price) for my mother, sister, cousins, aunts and two friends of mine. Not any major operation. The first sale doctrine applies.

You are so staggeringly misinformed it is almost unimaginable. You don't know the basic facts of the case and yet you presume to argue the merits?

First of Kirtsaeng is a he, not a she. Second, it was a commercial, for profit operation. No one disputes that. Third, wtf does you buying lotion for your Mom and (probably) Victoria's Secret panties for yourself have to do with ANYTHING?

Here's a paragraph on the background of the Kirtsaeng case from theatlantic.com:

John Wiley & Sons, a textbook publisher, sells expensive versions of the textbooks here and less expensive versions abroad. Supap Kirtsaeng, a foreign graduate student at University of Southern California, decided to help pay for his schooling by having relatives buy him copies of the foreign versions abroad, send them to him, whereupon he'd sell those books on eBay to willing students. He'd make money, the students would save money, but Wiley might have fewer sales of its pricey American versions. The case is styled Kirtsaeng v. John Wiley & Sons.

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Again, this isn't about the RIAA or MPAA worrying about people buying Bollywood vs Hollywood, or competing with indys or foreign producers. They have a monopoly on their own titles. This is about Hollywood having to compete with ITSELF. This is most easily solved by normalizing pricing on a global scale. Yes, that may mean a couple fewer Avengers sales in Kenya, but they wouldn't have to worry about their own product undercutting themselves.

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Lets say the book sells for $10 in the US and $2 in Mali. The book costs $1 to produce. If someone imports 1000 books from Mali and undercuts my price in the US, I lose $8000 ( US price minus Mali price times 1000). It then becomes a decision of whether the Mali market with its $1 profit margin is worth servicing if it provides direct competition to my US market where I have a $9 profit on the same item.

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I am the sole source of a text that is required for a certain class. So lost sales are undoubtedly actual losses, not wishful thinking.

Nope. Still wishful thinking. It doesn't matter that you hold your customers by the short hairs with asinine class requirements. By your standards, every textbook resold at the college bookstore or shared between friends who have the same class is a lost sale.

Yes I did. The difference sales at $10,000 and $2000 includes the $1000 profit made from sales in Mali.

Ok, my mistake. But the end result is still a gain of $1000 since lost sales mean nothing.

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"I am the sole source of a text that is required for a certain class. So lost sales are undoubtedly actual losses, not wishful thinking."

Nope. Still wishful thinking. It doesn't matter that you hold your customers by the short hairs with asinine class requirements. By your standards, every textbook resold at the college bookstore or shared between friends who have the same class is a lost sale.

You are still wrong. Books being re-sold or shared are a market factor no matter what. And that resale/sharing factor influence price. The price erosion pressure that comes from reimporting books further erodes the price. It is not a benign force.

"Yes I did. The difference sales at $10,000 and $2000 includes the $1000 profit made from sales in Mali."

Ok, my mistake. But the end result is still a gain of $1000 since lost sales mean nothing.

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You are still wrong. Books being re-sold or shared are a market factor no matter what. And that resale/sharing factor influence price. The price erosion pressure that comes from reimporting books further erodes the price. It is not a benign force.

Ok, but this looks like price erosion caused by natural market forces overcoming an artificial barrier placed in the way to me. It pretty much gives me a divide-by-zero error trying to equate that to "lost sales" in any way, shape or form.

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It then becomes a decision of whether the Mali market with its $1 profit margin is worth servicing if it provides direct competition to my US market where I have a $9 profit on the same item.

Simple question: Why not set the prices at a fair profit margin globally?

We do live in a global market nowadays. I can visit a Mali bookselling website with one click and compare with your US prices rather easily. If you are selling your books in Mali at $2 and are happy with that profit margin, why are you charging $10 in the US?

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Because professor, in the case of textbooks we've been discussing- a global price set a the intersection of the global supply and demand curves would be massively influenced by the US and other wealthy, industrialized markets. The low demand from the third world would barely move the needle as the demand is so low. The net effect would be that those textbooks would be priced significantly higher than if using regional market pricing. This is Econ. 101. This is not difficult to fathom is you are truly thinking independently. In this case, regional pricing promotes greater affordability and access. How can you possibly oppose that?

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How does the above economic practice remain stable in a world where instantaneous, global communication and relatively inexpensive worldwide shipping exists?

Good question. It may not. Enforcing current law (assuming Wiley prevails) will certainly help considerably. But the consequence of instantaneous global communication and relatively inexpensive worldwide shipping is that regional pricing models will be a thing of the past. And what that means (at least in economic theory) is that third world prices of US text books will rise to prevent erosion of margins in more profitable first world markets. What won't happen (which is the misplaced hope and expectation of many) is that first world prices will decrease to defend market share in the third world. In this case, high margins in large markets will continue and low margins in small markets will be abandoned. All to the detriment of those small (third world) markets.

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Interesting. The whole theory really depends on a separation of markets in the first place.

Now I understand that there are other natural divisions that currently exists between markets, mainly language and currency.

But even those are being further eroded by technology aren't they? We have simple tools like Google Translate available, so language isn't too much of a barrier anymore. We can calculate an exchange rate at any given moment. Other than things that are artificially manipulated, like exchange rates and import tariffs, what is really stopping us from developing a global market where it's truly equal across geographical regions?

It just seems like the idea behind regional pricing, while most definitely useful in the past, is becoming antiquated and edging towards existing only to serve itself.

Bollywood = Hollywood - 20

That "self-competition" still exists here in the US. That might be part of the problem that Big Content is facing now. They have a terminal format on their hands and decades of content available out there that will only ever need to be purchased once.

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I tend to agree. Why would any producer of goods undercut its most lucrative market? If they are selling an item for $2 in a poor nation only to have them re-imported into the US market where the price is $10; the likely response is to stop sales entirely in poor countries. To do otherwise would be to enter into a pricing war with yourself.

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The full on implications of being allowed to sell something you've purchased legally in another country? You're joking, right? Here's a thought - fuck the *AA. If they can't stay in business on their own, I don't give a fuck enough to give up rights to help them stay afloat.

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Frayed ends of Hypocrisy

You seem to be getting your panties in a bunch quite a bit over "incidental time wasting entertainment".

You make it sound like this sort of stuff should not be held in higher regard than obviously more important things like free speech, personal property rights, the security of the internet and the rest of the economy.

If the market can't support something then it goes away. That's how the free market works. This isn't communism. You can't just let the state be your patron.

You've got to be able to actually convince people to buy from you.

Acting like a total jack*ss usually doesn't help in this regard.

It's like Romney and his 47%. You can't insult the customer and expect them all to take in stride. Some of them are bound to take it personally.

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The first reason your argument sucks is because Mike is arguing, in this case, for the law to remain as it has been and to preserve the first sale rights consumers have always enjoyed. So your predictions of doom and gloom would already be true and there should already be no music or movie industries for the reasons you just cited. What else even needs to be said.

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- Government intervention in copyright markets
- Region-locking
- A strenghtening of the weakest copyright rules towards the most draconian. No compromise!

Doing this on the internet would take a complete reinvention of the basic setup and removal of any kind of cryptation to allow a surveillance that is even close to what would be needed.

Just trying to sculpt the world around how you want it to be and are used to things being done is not only impractical bordering impossible. It is dilusional!

When we are operating in worlds with no possibility of enforcing this kind of draconian border control, you have to do without the price-differentiation. You are forced to compete on a market that includes the low price markets and low copyright barriers. No matter how hard you try to build an illusion of price-control!

You have to, gasp, cut costs and reinvent your business-model from the "charity" for the poor you describe to something that can survive a fight on lower prices!

This case will not change those facts. If the judges rule in favour of the region-specific pricing, it may make the record companies survive for a month or two longer than they would otherwise, but have no illusion about the long run. The sign says: "Change or die!"

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The real issue here is that the economy of each country is not the same. A CD that sells for $10 in the US might only sell for a fraction of that in another country. In order to stay competitive in that country, they have to price at maybe $2. The local distributor licenses from them at a price in consequence of that $2 retail price.

This is entirely a business model decision. No one is forcing them to charge different prices. Maybe that business model worked great for the last century, but if the world has changed such that this business model no longer works then they need to move on. Why should we be restricting consumer rights just so that they can continue to use their chosen business model that relies on (now) artificial scarcity?

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What if the consequence of the universal pricing you insist on is that it is universally high rather than universally low? What does that mean to impoverished people? And what will that sentiment mean if it is applied to things like medicine?

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Speaking of unrealistic, that whole argument is just so far beyond silly is preposterous.

Your argument is only valid if no business ever imported goods from another country to sell here. However, decreased labor/production costs are one of the largest reasons so much of our manufacturing base has already been shipped outside the US. Now I don't know what percentage of books sold in this country are actually manufactured overseas, but it wouldn't surprise me to learn a large portion of them came from the same overseas wholesaler (assuming the guy was actually able to buy direct from the wholesaler and not have to buy from a retailer) this guy got his merchandise from (and probably at a lower price, since most places give a discount based on bulk purchases - this is how Walmart manages to keep prices so low).

Now you eliminate the First Sale doctrine, and the incentive to outsource even more manufacturing outside the US has now increased exponentially. No more competition from resale shops, second hand stores, or refurbished products? And we're not just talking about a book, CD, or DVD.

Sorry, you can't resell that shirt it was made in China. That computer? Made in Tiawan. Can't sell that chair, either. It was made in Malaysia.

And I can tel you from experience that many people (not by any means all, but enough) making decisions at the tops of larger companies have little clue how much the secondhand/resale market impacts the US economy, they'd just see this as a way to eliminate even more competition by moving even more manufacturing overseas (hitting us not once, but twice).

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It's Wiley's own product!!!!!!!! Wiley isn't complaining about a competing product, they are complaining about a middleman buying it in a low cost market and using it to compete against Wiley in a high cost market. This isn't the case of a competitor offering a competing textbook at a lower price.

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I hope that the Supreme Court makes a good decision. I agree that clarity is needed. I hope that the "used" market is not impacted. I don't think that's right. But I also do not think that it is OK for a middleman to reimport new items in a low cost market and use them to undermine margins on the identical product in a high margin market.

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"Mike, this is another case where I seriously wonder what you were doing while you were at school, because you clearly didn't get much of what was going on.

You have to pay attention and THINK for a minute. The real issue here is that the economy of each country is not the same. A CD that sells for $10 in the US might only sell for a fraction of that in another country. In order to stay competitive in that country, they have to price at maybe $2. The local distributor licenses from them at a price in consequence of that $2 retail price."

Jesus Hopping Christ.

You have just presented a sound argument to ban ALL selling of imported ANYTHING.

You have also presented a sound argument for making it illegal to give anyone a gift purchased overseas, as that would be an unauthorized redistribution for a return of zero dollars.

Have you ever heard of the import/export business? Ever wonder what that was? Think about it.

Mike's argument is that either we do in fact make all gifting and selling of imports illegal or we don't single out makers of CDs for special treatment.

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Where does this CD sell for $2? Imaginationstan?

On the surface it sounds reasonable the words your babbling forth, but that pretends that we can't see that they charge even more everywhere. There is no place where they lower the prices. Maybe if they started thinking of it as 1 global market, because *GASP* that is what we have now, and took out their own middlemen stumbling blocks they could stop trying to charge more based on the region and just release it at 1 price point that is then converted into the local currency rate.

The going rate on iTunes is like $1, can't be hard to charge the same price in Yen, Rubles, etc...

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Your post is one big pile of logical fallacy. If producing content in the US didn't generate profits, both the movie and music industries would've eschewed those methods a long time ago for something else, yet they haven't.

It's not the consumers' fault when a movie studio decides to blow $100 million just to produce ONE movie, let alone be held responsible should the studio not recoup, now isn't that right?

If content was so darn expensive to make then kindly explain why there's such an abundance of content being produced on the local level? Yet I'm supposed to buy this notion that all these mega-rich corporations cannot afford to? Tell me, how much money do the major labels and movie studios have sitting in their back pockets? How much money do their top CEOs pull in annually? I'm very curious.

It's obvious that the folks over at the RIAA and MPAA sit around discussing ways that they can rook the system in order to line their own pockets, whether it be harassing small business owners with legal threats (read: extortion), using their absurd tactic of double-dipping royalty rates, copyfraud, et al. And now they're attempting to rescind the first-sale doctrine, trying to paint this phony doom & gloom situation whereby the economy will collapse (*GASP!*)unless they're allowed to syphon profits from the sale of used goods.

These royalty collection societies are greedy parasites that do absolutely nothing beneficial for our economy.

Extending the first sale doctrine to copies made abroad for distribution in a foreign market could impede authors’ ability to control entry into distinct markets, limit their flexibility to adapt to market conditions, or undermine territorial licensing agreements.

Funny - I read through Title 17, and I couldn't find any mention of controlling entry in distinct markets, flexibility to adapt to market conditions, nor enforcement of territorial license agreements mentioned anywhere there. If these are copyright issues, you'd think they'd be in the law somewhere as protected rights.

Re: Rights in distinct markets

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

...

3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
...

The copyright holder is granted a monopoly, they can distribute however they wish.

The issue is that the limitations on § 106(3) aren't in force for foreign sold goods:

17 USC § 109:

(a) Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.
...

If we look at House Report 94-1476 on § 109 (a) we find:

To come within the scope of section 109 (a), a copy or phonorecord must have been “lawfully made under this title,” though not necessarily with the copyright owner’s authorization. For example, any resale of an illegally “pirated” phonorecord would be an infringement, but the disposition of a phonorecord legally made under the compulsory licensing provisions of section 115 would not.

Which tells us the language was selected to make it possible to sell a copy produced based on a limitation to § 106. A Congressional cure might be to amend "the owner of a particular copy or phonorecord lawfully made under this title" to "the owner of a particular copy or phonorecord lawfully made under this title or by authority of the copyright owner".

The idea being the prevention of expanding the copyright owner's rights for foreign sales to exclude first sales exemption

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The closest you are going to get in Title 17 to what you mention is going to be at 17 USC § 602, which bans "infringing importation ... of copies", specifically stating that the importation of copies acquired outside of the country into the US without the copyright holders consent is consider a violation of the right to distribute. In the end, the first sale argument at the crux of Kirtsaeng is aimed at this provision.

they are one of the reasons the economy is in the state it is. trying to pass the buck wont help and trying to get people in the US to pay for the same item more than once certainly wont. however, i suppose according to them, it's ok if they sell things elsewhere impeding the local markets. best bet would be for the RIAA and MPAA to just cease to be!

Their words give them away...

Copyright protection is essential to the health of the motion picture and music industries and the U.S. economy as a whole

So the whole US economy will collapse w/o copyright?

authors’ ability to control

And here it is. They admit they want control.

obtaining the economic reward Congress intended

No, the intention was to progress the useful arts, rewarding the producers is a side effect.

which may be substantially less generous or well enforced than U.S. copyright lawsupported 2.1 million jobs

A quick Google search did not tell me how many jobs are in the use, but there are over 300 million people, subtract half or more for kids, retirees and the unemployed and maybe end up with 100 millions jobs. So they want us to bend over backwards for a mere 2% of the jobs? Not to mention that even given their dire predictions are true, not all jobs would be lost so maybe it is 1%?

Because having the courts and Congres prop up old business models must be better than actually innovating and (*gasp*) letting people resell what they legally bought.

I don't think there's an issue of someone reselling their personal copy of a CD. The problem comes when someone tries to build a business model by doing it on a large scale. I don't see any innovation here. Only something that result in a further restriction of access to culture in poor countries.

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The guy who comes in and fills those abandoned markets. Your assumption, just like the mafiAA and drug cartels is that they are the only ones who can fill the need. That is not true now, never has been and never will be. Look at the drug industry in India, tons of players there, but you are trying to ignore that and make up your own scenario.

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To be fair Copyright = State granted monopoly. Anyone "filling" the market would be breaking the law.

Drugs is the exception where "generic" medicine is kept legal (because of some very, very unfortunate courtcases in South Africa where a plethora of big pharmaceuticals sued to keep generic HIV-medication out, disregarding the fact that they could never saturate the market anyway with the prices they "needed" to take! See Doha declaration or 2001 lawsuit).

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The inevitable response is that the producer of the good will no longer sell into that market. Not a huge deal with entertainment but a big deal with software and enormous problem if its medication. For people who incessantly cry about collateral damage, I'd have thought this would be apparent.

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In what way is it apparent? Are you saying that businesses are running underground charities? If I don't agree to pay for an overpriced CD(or whatever) in the US, then some poor orphan in a third world country somehow goes without music/software/medicine? If I want to give to charity, I'll give to charity, not buy an overpriced item.

I suspect the motives of the businesses in question are capitalistic, not altruistic. If they were somehow loosing money in those other countries, they wouldn't sell there. I don't doubt that they'd prefer to sell at a much higher price for no other reason than, hey, they can, but that's not really a net benefit to the consumer.

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No I'm saying that margins are cut in certain markets to reflect the local economy in some industries. If the reward for serving those markets is that people will buy in wholesale amounts and reimport to compete against the original company in a high price market- then that company will simply withdraw from the low price market to avoid having to compete against itself in the high price market.

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So...we should limit every person's right to resale to prop up larger margins of some companies over the threat that they may pull out of smaller-margin regions? Why should I sacrifice to save a company from having to make a business decision? If it's not economically beneficial to sell to a certain market...perhaps they shouldn't be selling there.

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So now, you're trying to compare the prices of music (which is a luxury in the truest sense) to medicine?

And here I thought some couldn't sink so low.

You heard it here first people. If the RIAA/MPAA's business models won't be supported through the courts, eventually the world will go mad. And how will the sick get their medicine? No point in providing for those who can't afford it.

What's that you say? Some countries put the lives of people over the needs of companies coffers? The hell you say?! Why, sounds like pure sense and logic have won the day.

I find it beyond amusing (as well as repulsive) that you're now trying to conflate the purchasing of physical discs of music and film to the purchasing of medication. But I suppose when trying to justify something that cannot be justified you'd have to try and tug at something near and dear to a great many. You sir (or madam) have a great future ahead of you working for those who need not be named. Say it with me, "But but but piracy and the used goods market! Hurtful, without proof, they are!"

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I don't know what you are trying to say here. You seem to understand that region-based pricing allows medicine to be more affordable in poorer countries. Presumably, you'd agree that lower priced books (movies, music or software) likewise have a societal benefit in those poor countries.

But then you seem to decry the notion that companies will withdraw from those poorer markets if unscrupulous middlemen import the product from the poor country to undercut the company in more lucrative markets- but only as it applies to medicine.

I really don't get that at all. You appear to want the low price in the poor country and to also allow middlemen to import to a high margin country and use their own product to compete against them in the high margin country; and somehow feel that the companies have some sort of moral obligation to promote the cannibalization of their own high margin market. Not an econ major I presume.

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"then that company will simply withdraw from the low price market to avoid having to compete against itself in the high price market."

...and will be replaced by different entities that will fill the now-unfilled need.

It may be tough for substitute drugs, high level software, textbooks and entertainment to fill that void. Particularly if they suffer the same fate- their own products being reimported and used to compete against them in their high dollar markets. I doubt anyone will have much incentive to serve impoverished markets if the cost of doing so is being undercut by their own product in high margin markets.

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Going down the list: generics, open source or a different company's product, different source, the countless amounts of free entertainment available and/or different source... Yeah, it would really be difficult for a country to replace those truly priceless things.

You seem to be under the mistaken impression that if a company pulls out of a country due to it not being profitable enough for them to operate there that no-one will step up to replace them. This is glaringly false, companies, both local and foreign would be chomping at the bit to enter a market with the demand side already filled, and the supply side recently vacated, as they'd make an absolute killing.

And as to the first company, who suddenly finds themselves undercut by the new companies and is now left in the cold? Who cares? For every market they pull out of due to it not being profitable enough, a whole slew of other companies will be more than willing to step in and fill the void.

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You seem to be under the mistaken impression that if a company pulls out of a country due to it not being profitable enough for them to operate there that no-one will step up to replace them. This is glaringly false, companies, both local and foreign would be chomping at the bit to enter a market with the demand side already filled, and the supply side recently vacated, as they'd make an absolute killing.

Doesn't that kind of depend on the capability of the entrants. I agree that products would be replaced but with the same quality and diversity? And should quality products be forced to withdraw from third world markets solely to prevent reimportation competition from undercutting their higher margin markets? How does that make any sense?

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Same quality? Perhaps, perhaps not. However, as soon as the higher quality product gets pulled from the market, the second best one automatically jumps to the 'best quality' spot. It may or may not be as good, but it's the best available, which is all that matters.

As to the second half, it may be brutal, but that's just how the market works, or at least how it should work. You either compete successfully in the market you're in, or you fade away as the more successful do so in your stead.

With regards to them making more in one market than the other, the only people who should be caring about that is the company itself, it's not for some outside group to come in and prop them up to make sure they make all the money they think they should be making.

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I agree that products would be replaced but with the same quality and diversity?

For software and music, yes they probably would. In the software world, the products from the big names are easily matched by open source in quality. In music, the same holds true. I don't see why this wouldn't be the case with textbooks (actually, I'd be very surprised if textbooks weren't dramatically improved).

Just exploit the first sale doctrine yourself.

You're forgetting the obvious:

Import the product from another country.

If Big Content doesn't want to authorize something for sale in a particular country then just import it yourself. This is something that ANY individual should be able to do. That it is allowed should be painfully obvious to EVERYONE.

The whole "region coding" nonsense is just a power grab for things not granted by law. It's an attempt to use technology to gain those things that the law doesn't really grant.

This has been common enough for gray market goods in the past.

It simply should never be the case that a publisher can keep a creative work out of a particular country. It's simply a power they should have.

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I'm not sure what you're saying here. Who says that the new companies would intend to serve any market but the local one? Who says they'd export or import at all?

In our textbook case, I think it very unlikely that a local third world company will be able to replicate the quality of the US textbook at a price anywhere near what the US book is sold at. The US publisher subsidizes the his third world sales with first world sales. Doubtful a third world text would get any traction in the US market. So how does the third world publisher make it worth his while in an infinitely smaller market with an infinitely smaller per capita income?

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More importantly, why isn't it happening now? What prevents the Royal Mali Publishing Company from publishing a textbook that competes directly against the John Wiley & Sons textbook in Mali and other third world countries in the region?

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In our textbook case, I think it very unlikely that a local third world company will be able to replicate the quality of the US textbook at a price anywhere near what the US book is sold at.

I have a hard time seeing how this is true. First, US textbooks tend to be pretty bad, and gradually getting worse. But even if they're great, why would that be hard to replicate?

The expensive part of a textbook would be the research -- a task made much easier and very cheap by the internet. Publishing can also be very cheap. The writing takes time and talent -- something that third world countries don't have a particular lack of.

The main part I'm not understanding is why you think that a third-world publisher would need to sell their works in an international marketplace. A tiny market can be plenty profitable.

The world doesn't need international corporations for this sort of thing. In fact, their existence is these spaces is actively harmful.

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Yes, they won't sell due to piracy or whatever stupid motive and leave shitloads of money on the table as ppl will still get what they want. MAFIAA stopped selling in Spain but Spain haven't stopped sharing ;)

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"The inevitable response is that the producer of the good will no longer sell into that market."

a) Are you really using the "I'm gonna take my ball and go home" approach???

I'm just the messenger. It's about what makes business sense.

b) To which the inevitable response is that someone else WILL step in, likely at a lower cost and more innovative approach. Just like another kid went and got another ball when you were a kid.

Maybe so. But given the popularity of US movies, music and software and the economies of scale they enjoy and the technical and artistic expertise, I humbly submit that if it was easy to make a market in a poor, third world country- people would already be there. Nigeria and India have a robust and low cost motion picture industries. Why aren't they dominating? Clearly they have much lower costs. My sense is that when the kid with the brand new leather Lebron James edition basketball leaves, no one is really interested in playing with a deflated old dodge ball.

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At 10:51am (EDT) you said,

Just to be clear, the RIAA and MPAA are the trade organizations for the labels and studios, respectively. The labels compete against one another as do the studios. In addition, they compete against the indys, foreign producers and more broadly- others competing to capture the entertainment dollar of consumers.

but now you say

But given the popularity of US movies, music and software and the economies of scale they enjoy and the technical and artistic expertise, I humbly submit that if it was easy to make a market in a poor, third world country- people would already be there. Nigeria and India have a robust and low cost motion picture industries.

So which is it? Are they worried about competition from low cost indies, or are they the sole creators of the content people want?

If, by your own argument, the MPAA and RIAA members are the sole source of the content, why don't they just up the price, so they aren't undercutting themselves in other pieces of this "global market?"

Meaning you can place the same value anywhere so there won't be such issues. So your point crumbles down.

So what if that then means that producers of software, medications, entertainment etc. simply increase prices in third world markets to guard against people reimporting and competing against them with their own product. Who benefits from that?

Do you honestly believe that US prices will be lowered to preserve a presence in marginally profitable third world markets?

Re:

So what if that then means that producers of software, medications, entertainment etc. simply increase prices in third world markets to guard against people reimporting and competing against them with their own product. Who benefits from that?

You seem to assume that producers set prices, rather than markets. So if they increase prices, consumers will go elsewhere, and it will be seen as a stupid move -- allowing competitors to come in at better prices.

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"So what if that then means that producers of software, medications, entertainment etc. simply increase prices in third world markets to guard against people reimporting and competing against them with their own product. Who benefits from that? "

You seem to assume that producers set prices, rather than markets. So if they increase prices, consumers will go elsewhere, and it will be seen as a stupid move -- allowing competitors to come in at better prices.

Where does it end? Why would an eager competitor jump into a low price, low volume, low margin market if doing so will simply allow his product to be reimported into his high margin, high price market to compete against him?

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Srsly, if you make the prices high enough in poorer countries it's pretty simple:

1- if the goods are not necessary for survival people will simply drop them (or get via other means anyways).
2- if the goods are needed for survival (ie medicine) the Govt will break the patents and make generic drugs.

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Srsly, if you make the prices high enough in poorer countries it's pretty simple:

1- if the goods are not necessary for survival people will simply drop them (or get via other means anyways).

To some extent. But clearly that society as a whole will suffer. In the case of entertainment, software or educational material replacement material will doubtlessly be either of inferior quality or obtained illegally. In either case, distribution will be less robust and the society will be less well served.

2- if the goods are needed for survival (ie medicine) the Govt will break the patents and make generic drugs.

What? You're saying that the government of Somalia or the Congo will waive a magic wand and build manufacturing plants and hire scientists and engineers capable of manufacturing pharmaceuticals? How long will that take? How do countries like that recoup the massive investment in the construction and technology required to do that? No outside investor is likely to enter as the limited market would be unattractive- not to mention that legitimate investors would be unlikely to see "breaking patents" as a viable strategy.

In any case you lose ;)

No, poor people lose. All because you of some stupid theory that companies should be required to compete against themselves.

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And anyone above the powerty line lose. All because you have some stupid theory that companies should be able to force governments to limit markets?

In regards to generic drugs you are just being silly. Please read up on the Doha declaration etc. Let me give you two hints: profit margins and patents...

In regards to the necessity. Please make a sensible and specific argument. Blanketing with 4 or 5 general concepts with no apparent relevance. Illegal or inferior quality is the scare tactics of trademark industry. Inferior entertainment is oxymoronic, educational quality is mostly about the internet access today since stupid professors are undermining your business with stupid free reservoirs and open crappy source, while software is basically the same argument as educational material except for professors being substituted by programmers.
Less robust distribution is probably correct, but as I say: The internet is already becomming the primary distribution-tool in less developed countries and complaining about a lack of rainforest-killers and older technology pushers is not really a good point...

No Hope For 'Em!

With improved methods of transportation for raw materials, finished goods, and data the marketplace is growing more global all the time. We are talking about a company that has made profits from a sale although a reduced amount, made a profit nonetheless or they wouldn't have bothered. That product is then repurchased, transported and resold again.

If owning the brand name, being the source, the company can't compete selling identical products in the marketplace against a reselling competitor who is dealing with three price markups of which the money for the entire first sum went to them then they are just doomed to fail anyhow and no amount of government granted monopoly is likely to save them.

Man, how the fuck trolls twisted the whole thing of selling something you bought for personal use in another country to massive organized crime business?

Can we please get back to the point and agree that selling something you bought for personal use in another country should be subjected to the first sale doctrine because it's the damn sane thing to do?

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I'm kind of surprised that you'd pick up where this idiot left off. Presumably Wiley lowered prices in poorer countries to sell more textbooks into a lower per capita income market. Kirtsaeng bought up books in that market and undercut distributors of Wiley's books in the US. What Wiley is likely to do is simply say "fuck it" we'll only sell books in the most lucrative markets if the consequence of selling in poor countries is that our books are reimported and used to compete against us in the US market.

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As someone outside the US I would say, "yes please, kiss me darling!". It might mean new books making it in as a standard and maybe, only maybe a slight decline in quality. But ultimately my point is that textbooks are far less relevant when computers and the internet exists!

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Again, that's not necessarily a bad thing: Perhaps we can reduce the coists of education to governments wlsewhere, meaning more monies freed up for other things that government need, like infrastructure.

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We don't know. And you are focusing on a single case when the majority is not even remotely close to it. There are mechanisms to prevent larger scale operations (and mind you I'm still not considering it to be large scale) without trampling with the rights of the absolutely great majority of the population (as in 99,999999% of the population). But no, let us crush the small ant with a nuclear bomb, seems reasonable.

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We don't know. And you are focusing on a single case when the majority is not even remotely close to it. There are mechanisms to prevent larger scale operations (and mind you I'm still not considering it to be large scale) without trampling with the rights of the absolutely great majority of the population (as in 99,999999% of the population). But no, let us crush the small ant with a nuclear bomb, seems reasonable.

Are you that clueless in reality or you are just trolling on purpose?

Apparently you continue to refuse to read up on the facts of the case so as to preserve your own stupid argument. If Kirtsaeng prevails what "mechanism to prevent larger scale operations" exist? None. Look at the situation in Post 136 below:

Textbooks and their pricing are one of the biggest scams ever.

As an example, I teach engineering at a university in Asia. The text I used last semester had a US price of $263. While the exact same text, with a soft cover stamped "NOT FOR SALE IN USA", was purchased by the school and sold to students for $36.

Exact same text, illustrations and mistakes. Looking inside it even states that it was printed in the good ol' US of A.

So if the publishing houses can do that sort of pricing for the overseas market, why couldn't they do it for me when I was paying $3000 a term for my books o' so many moons ago...

If Kirtsaeng prevails, I can purchase these textbooks for $36 and reimport them into the US. In the US they retail for $263. I can make a killing selling them for $163- a full $100 less than retail, but $127 more than I paid.

If that is allowed, how long do you think the publisher will sell that textbook in Asia for $36? He'll either raise the price to make reimportation into the US not worthwhile, or simply withdraw from the market. He will not cannibalize his own margins in the US for the purpose of selling $36 textbooks in a much smaller Asian market. Why would he?

Finally, your accusation of cluelessness is laughable. At issue is a decision with major implications in the real world. That is why the Supreme Court took it on.
And this business of labeling everyone you disagree with as a troll is infantile, though not unexpected from someone some hopeless unable to defend their point of view.

Theoretical Isolated Markets

If your "market" is no longer an isolated one then your control on pricing adjusts to what the market itself will bear regardless of what you want the price to be. Attempting to create artificial barriers that enforce these 'walled off' market segments is a short term solution at best. The fact that implementing them with laws guarantees that it will have negative impacts across the board as well. We are living in a global economy and the market is no longer a single country with physical borders being the market limitations. Modern technology has created a situation where those borders are a negligible hindrance. If the *AA (or other corporations) cannot adapt to that fact then they will end up being replaced. It's exceedingly simple. *shrug*

"It appears that the RIAA and MPAA are pretty scared about this possibility. They've filed quite the amicus brief in the case claiming that buying goods overseas and selling them in the US is the equivalent of piracy. No joke:"

Well in that case the RIAA and MPAA should start bribing the US government to ban all countries imports and trades with the US from entering the country to be sold. They should also bribe the US government to create an internet wall of US and ban all non US websites from being accessed too. This should stop people importing goods into the US to be sold and therefore no more piracy.

This of course will never happen because if the US created a great internet wall of US and stopped all imports and trades then there will be lots of jobs destroyed and the US economy will totally suffer.

In the RIAA and MPAA's defence, Techdirt did recently write about the Copyright Act explicitly saying that disruptive innovation should be blocked.

Although if arbitrage is "theft", which I assume is what's being implied here, does that mean I could get ICE to shut down the iTunes store in the US as tracks there are around 25% cheaper than in the UK? Surely iTunes has to be the biggest music piracy site out there by far.

Re:

iTunes and the record companies have already struck deals on sale. They have both been investigated for price fixing several times. Right now a suit is running on eBooks in USA and EU has pricefixing on eBooks and eMusic on their active investigation roster.
It would seem that the arbitrage in this case is in the agreement between iTunes and the publishers!

If we assume that it is possible to make a computer believe that you are in another country, there is a also the possibility for third party prividers to create their own arbitrage market inside iTunes itself! Point is: Believing in and wanting a full separation of countries on the internet is the whole point of the business-model RIAA and MPAA are fighting vehemently for.

Save us from ourselves!

Hmmm. The usual argument for huge protectionist tariffs (lets call it what it is) is that the economy will collapse unless we protect domestic producers from being undercut by cheaper foreign competition. In this case we are being implored to protect domestic producers from having to compete with cheaper goods from...themselves. Right.

How dare we import something from overseas where it's available at a lower price. Artificial scarcity --> artificial markets --> artificial prices.

Re: Re: Save us from ourselves!

"Again, would you prefer that the price be the same in the third world as the first world? Who does that benefit? I think what you really want is the third world price in the first world."

I would prefer that prices everywhere were set fairly by supply and demand in free markets without artificial barriers whose sole purpose is to extract higher profits without providing more value. Prices would likely still be somewhat higher in wealthier countries where the demand and disposable income are greater.

Who does that benefit? Everybody who is currently paying artificially inflated prices. If they can sell it at the "third world price" and still make money (and it's a bald faced lie that they are selling at a loss anywhere) then why should we tolerate "first world pricing"? What other industry gets to do that?

Re: Re: Re: Save us from ourselves!

What artificial barriers are you talking about? The intersection of the supply and demand curves is at a very different price in a third world country than the US. Given the smaller size of the third world market it is hard to imagine that their demand would appreciably lower price of the item. So if you do as you suggest and treat the world as a single market, the third world would be in for much higher pricing than the current regional pricing model affords. And the first world's price would't be dramatically lower either. However, the ability to keep prices low in the third world goes out the window when product allocated to the third world erodes margins in the first world.

Re: Re: Re: Re: Save us from ourselves!

I'm talking about using legal barriers to impede the natural flow of goods across borders in order to enforce separation of markets and higher prices than a free market would support.

The intersection of the supply and demand curves is at a very different price in a third world country than the US.

Those curves also intersect at quite a different point in say inner city Detroit than in Beverly Hills. Shouldn't the oh-so-altruistic content industries be morally obligated to sell their wares for much lower prices in poor domestic markets too? And if so, should it be illegal for me to go to Detroit, buy a box of cheap DVDs, drive them to California myself and sell them at the higher price? What artificial legal barrier will you erect to prevent me from doing that?

Companies are not selling at a loss in poor countries out of the goodness of their hearts. They sell at lower (but still profitable) prices to extract that extra bit of revenue they would otherwise miss out on. What about the poor residents of otherwise wealthy countries who cannot afford the first world pricing? Where is your moral concern for them?

Re: Re: Re: Re: Re: Save us from ourselves!

Companies are not selling at a loss in poor countries out of the goodness of their hearts. They sell at lower (but still profitable) prices to extract that extra bit of revenue they would otherwise miss out on.

That might be right. But if it has the effect of cannibalizing their larger profits in high margin markets, how long do you think that will go on?

My only point in this discussion is if identical, foreign manufactured goods are allowed to be reimported for the purpose of undermining the high margin market- those books, movies, software, music, medicines, etc will simply not be sold or the price will be increased to the point where there's little incentive to reimport.

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High prices and high margins are not necessarily the same.

To me the pricing seems to be a scam. Instead of looking at the product you are selling to set a price, you are setting it solely based on "expected value". It is the monopoly market at work and the need for government intervention in this case is created solely by pricing of the monopolist. The level of unfounded assumptions you are setting up to reach the conclusion of the industry being threatened by unfair competitionm is mindblowing.

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Which gets to the real issue of all of the opponents. You want to use whatever means to get it cheap.

In any market, if a good or service is too high it will attract entrants who want a piece of that market. I assume that barriers to enter the textbook market are fairly high owing to the level of expertise of the authors of the content and the natural limits of the market (students requiring that kind of text) Higher technical medical texts require greater (and more scarce) intellectual inputs and have a smaller potential market than an entry level English comp. text. So if a medical text is $500 and an English text is $50, both are likely not overpriced because if they weren't, new competitors would enter the market.

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I'm somewhat surprised that I hardly ever see 'Red Baron v. Taito' brought up when it comes to these sort of 'grey market' situations. Both the court and Taito conceded that first sale/exhaustion applied to the original purchase of arcade boards in Japan:

'At trial, the district court held that both of Taito’s copyright infringement claims were barred under the “first sale” doctrine, codified in 17 U.S.C. §106(3). In reaching this determination, the court reasoned, “Taito’s initial sale in Japan of the circuit boards for Double Dragon extinguished all rights that it had under copyright laws.”'

Ultimately, Taito won it's particular case based on the notion that having the arcade machines set up and playing the demo constituted a 'public performance', but forfeiture of the right of distribution WAS upheld under first sale for a foreign made and marketed good.

Taito argued that the first sale doctrine, although essential to the discussion of Taito’s “right to distribute,” has a separate and distinct application regarding the right to perform publicly.

In order to enact their legal shenanigan, they had to admit that first sale applied.

Also the 'public performance' nonsense was overturned by a higher court ruling. Even if it wasn't it still would have been legal to own and use the cabinet according to first sale.

US economy may collapse?

So Masnick, you've been curiously absent from the discussion. Let me ask you this. Lets suppose that you have a US based medical textbook business and buy those books from the publisher for $100 each. You sell 10,000 to medical students every year for $150. The same publisher sells those books to me in a third world country for $50. Due to the local economy I can sell about 100 books at $60 each. But this year, I ordered 10,000 and set up shop next to you and offered the book for $100. You can't compete because I'm selling at your cost. The publisher gets $50 less for each of those 10,000 textbooks. This is competition? This is sustainable.

Now assume that it is a global "free market". How much of an affect on price is the demand for an additional 100 books? C'mon, you have an MBA. Tell us how this is a viable model?

Re:

It is a company teeing up unfair competition between two subsidiaries. For some reason they are not charging the same for the product even though it is produced the same place and they are identical (I assume those are prerequirement for the thought-experiment. Reality is very different, but it is irrelevant.). Now, for some completely inexplicable reason subsidiary 1 finds out that subsidiary 2 is getting the book cheaper from you, probably because of the subsidiaries meeting.

Now your analogy is taken in a completely different and less logical direction, but if I understand the situation correctly you will not see subsidiary 2 contacting you, but instead subsidiary 1 will show up at your office furious and insists on renegotiating your deal.
In my scenario subsidiary 1 will initiate a meeting with you to reduce prices and subsidiary 2 will not renegotiate anything. Now tell me how likely this situation is? Also, my question to you is: Why discriminate to begin with? We are in the 21st century and slaves are distant past while even LGBT have almost equal rights!

As an example, I teach engineering at a university in Asia. The text I used last semester had a US price of $263. While the exact same text, with a soft cover stamped "NOT FOR SALE IN USA", was purchased by the school and sold to students for $36.

Exact same text, illustrations and mistakes. Looking inside it even states that it was printed in the good ol' US of A.

So if the publishing houses can do that sort of pricing for the overseas market, why couldn't they do it for me when I was paying $3000 a term for my books o' so many moons ago...

Whats the problem?

RIAA & MPAA

Wow, this could impact the entire economy? How? A few schlemiels in the industry can't buy a new Lamborghini and we're going to have a collapse? Screw those clowns! Maybe they should get real jobs instead of leeching off people who have real talent.

Re: RIAA & MPAA

I hate working overnights, because I'm always so late to these conversations.

If anyone's still paying attention: the copyright corps want to call this piracy because it really is piracy, in the sense that piracy is the way you undermine mercantilism by turning it against itself. I'd like to draw your attention to this blog/opinion article from around the time of the financial crash in 2008:

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UK

What we really need is for artists to have a way to be paid through a system like paypal(but not paypal), where anyone needing to pay to use music goes to a site fills out a form and transfers money directly to an artists account.
Why should there be a middle man. Maybe have the collection society to investigate whether people are not paying or getting a licence to play the music they want to play. If an artist wants to use the collection society then they pay a certain percentage recouped from businesses not paying for using a registered artists music.
A very low percentage , or even have the business using music illegally have to pay costs to the collection society.

Control of the music needs to be returned to the artists, the world is a much smaller place where anyone anywhere can sell to someone around the world with almost no cost to themselves.

Artists do not need collection societies any more, or if they do they need them to concentrate on resolving problems with studios and big businesses trying to take advantage of artists.

The old system is collapsing and they are doing anything they can to stay relevant , this is why they are doing this , trying to make sure they have control over every sale in America.

So how much is it really worth???

This case raises a question - if they can sell it at lower prices in different markets - how much is it really worth? They purport that their bottom line is protecting their ability to make a profit - so they MUST be making a profit in foreign markets where they are selling items at a fraction of the cost they are selling the exact same products to Americans; so if they can make a profit on 2.00, how are they justifying the 20.00 we have to pay - on a DOMESTIC PRODUCT, no less???

It sounds more like they want the right to continue to rip off every American. They also seem to want the right to make a profit from non-retail sales, it may not come up in this case, but that's the next logical move. They are encroaching on our right to liberty, freedom and preservation of the American way - I hope the Supreme Court looks deeply into this, as it is affecting more than just copyright.Its heading into Marxism territory...

Re: So how much is it really worth???

You really don't understand how prices are set do you? If a price rises to a certain level, new competitors enter the market and drive the price back down. Producers have to be concerned about substitutes for their product. If the price of jumbo shrimp rise drastically, people will substitute lobster. If one producer increases the price of Grade A wheat, he will lose market share until his price comes back into line. Brand loyalty and popularity is also a factor. Why do you think Apple products are so expensive? They are perceived as hip and cutting edge and have a dedicated following. Hell, there was a perfume that advertised itself as "the most expensive perfume in the world". In that case, high price was seen as the advantage.

Capitalism is a brutally efficient system. I'd argue that in voluntary free and accessible markets are are few true "rip-offs".

Fifteen men on a dead man's chest
Yo ho ho and a bottle of rum
Drink and the devil had done for the rest
Yo ho ho and a bottle of rum.
The mate was fixed by the bosun's pike
The bosun brained with a marlinspike
And cookey's throat was marked belike
It had been gripped by fingers ten;
And there they lay, all good dead men
Like break o'day in a boozing ken.
Yo ho ho and a bottle of rum.

Re: Re: Re:

So he manages not to cry about copyright enforcement (instead crying about another form of IP protection) or extol the virtues of infringers in a single article and all of a sudden he isn't Pirate Mike any more? That's like saying that because you managed a single post without saying something stupid, that you not still an idiot. You are, and this post didn't break the string either.

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So in other words, you're arguing for the right to ad hominem and derail the conversation regardless of relevance on the matter, and insult anyone who calls you out on it.

You epitomise what the RIAA and MPAA consistently feel about the people that might otherwise have been their consumers: regardless of whether you purchased, pirated, or happened to pass by a radio that may or may not have been playing Top 20 content, you're a filthy pirate. Have some harsh laws and settlement threats while you're at it.

How you consider the above to be reasonable, rational or otherwise even acceptable is beyond most people.

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You and your ilk feel the need to allude to Masnick's alleged piracy on just about every single article regardless of relevance, insult everyone else as a pirate when this is pointed out - and I'm the thin-skinned pantywaist?

Brilliant argumentation. It's clearly the high courts treatment for you and low courts treatment for everyone else.